The recent announcement from Prime Minister Justin Trudeau that Canada is closing its borders will be a tough pill to swallow for both the hospitality and airline sectors, especially since both are already feeling the strain from the coronavirus pandemic. – More layoffs expected in travel and hospitality sectors
While many Canadians are concerned over potential job losses and reduced income, many workers from the hospitality sector have already been given their notice. The sector is a significant one, and includes workers in the hotel and casino industries. Airlines will also likely suffer the same fate. The union representing flight attendants from WestJet is predicting that over half of staff will be laid off due to the increasing number of flight cancellations. Union officials received an internal memo obtained by the Canadian Press. The memo stated that travellers are rebooking flights in their droves, which quickly increased the gravitas of the situation.
Reduced workforce in cost-cutting measure
Air Canada talked about reductions in the workplace as a way of cutting costs designed to reduce the effects of coronavirus on its business. In a recent news release, the airline said that it predicted a 50% reduction in capacity for the April-to-June period. The company further withdrew its guidance for the first quarter and full year, along with its full-year guidance for 2021.
Air Canada refused to provide further comment regarding preparation for job cuts and the extent of any intended layoffs.
Trudeau announced that Canada will be shutting its borders to those who aren’t permanent residents or citizens of Canada, with exceptions made for U.S. citizens, immediate family members, diplomats, and aircrew staff. Furthermore, Ottawa is restricting the number of airports in the country, reducing international flights to four.
Month-long EU travel ban
Another recent announcement from Ursula von der Leyen, president of the European Commission, proposed a month-long ban on non-essential travel to the European Union.
On March 12, Transat A.T. announced a seven per cent increase in revenue in the first quarter of 2020 compared to the same period from the previous year, as a result of an 11 per cent increase in tourists travelling to its sun destinations program. However, Transat also revealed that they had seen a decline in daily bookings from 2019 beginning on February 24, and that they had seen a significant decrease of late. Both Transat and Air Canada said that they were saving on costs due to lower fuel prices.
Major airlines in the U.S. sought a bailout from the government worth over $59 billion, as the White House was drafting a financial assistance package due to the lack of demand in U.S. travel. Airlines for America, a trade group that represents United Airlines and American Airlines, among others, said that unless action is taken, it may see each of its members run out of funds by the end of the year- even sooner if credit card companies withhold payments.
Temporary casino closures
In the hospitality sector, casino staff are also being affected. Ontario recently announced that it would be temporarily closing all casinos, while major operators announced temporary closures in Quebec and British Columbia. To quote one of sources from Betsafe, online casinos can expect to benefit from these closures, as it only stands to reason that visitors of land-based casinos will flock to their digital counterpart. That should at least provide some consolation to the casino industry as a whole.
Many laid off from casinos and hotels are part-time staff who fail to qualify for Employment Insurance benefits, so are incredibly vulnerable without any long-term safety net available. Fortunately, the government has just announced an emergency response benefit package that supports workers affected by coronavirus. That should at least provide some temporary relief. The package includes both employed and self-employed workers who have lost their job or who have been told by their employers not to come into the workplace due to insufficient work available.